u In answering the question, you should emphasize the line of reasoning that generated your resultsit is not enough to list the results of your analysis. Include correctly labeled diagrams, useful or requiredin explaining your answerA correctly labeled diagram must have all and curves clearly labeled and must show directional changes. The economy Zarland is operating below the full-employment level of output with a balanced budget Draw a correctly labeled graph of short-run aggregate supply, long-run aggregate supplyand aggregate demand, and show each of the following country's current equilibrium output and price level, labeled x 3 and PL 1 , respectively The full-employment output, labeled Yf bIf Zarland increases government expenditures and taxes by equal amounts, can aggregate demand increase? Explain If Zarland decides to pursue an expansionary monetary policy, what open market operation should the central bank undertake ? d Using a correctly labeled graph of the money market show the short- run effect of the open- market operation you identified in part () on the interest rate. As result of the interest rate change associated with the expansionary monetary policy, will the supply of Zarland's currency in the foreign exchange market increase, decrease, or remain the same in the short run? Explain f. Based on your answer in part ()will the value of Zarland's currency in the foreign exchange market increase decrease, or remain the same in the short ? Following the change the value of Zarland's currency that you identified in part ( Zarland's exports Increase decrease or remain the same in the short run? Explain
Su In answering the question, you should emphasize the line of reasoning that generated your resultsit is not enough to list the results of your analysis. Include correctly labeled diagrams, useful or requiredin explaining your answerA correctly labeled diagram must have all and
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